During Than Shwe's years in office, the ethnic insurgency in the frontier areas has been largely pacified, using a combination of Lt.-General Khin Nyunt's strategy of negotiating ceasefire deals and General Maung Aye's military offensives. In some regions, narcotics warlords such as Khun Sa have been allowed to legitimize their business activities as long as they lay down arms. A few rebel groups (most notably the Karen National Union) continue to battle the government, but their numbers and territory are much reduced.
With the junta's army in control of most of Myanmar, large-scale forced labor has been reported on infrastructure projects such as roads, railways and dams, along with forced village relocation and other human rights violations, particularly in ethnic minority areas. These abuses have been repeatedly condemned by the UN General Assembly, the International Labour Organization (ILO), as well as independent human rights groups.
Under the SPDC, military spending accounts for as much as 50% of Myanmar's budget, which cuts health, education, and welfare programs. The World Bank in early 2000 issued a scathing report on Myanmar's economic and political situation. Accusations have been leveled by observers that the economy relies on forced labor, and (with overt money-laundering) depends on the proceeds from trafficking in heroin and methamphetamines. Rampant deforestation and other environmental problems have gone unchecked under Than Shwe's government, along with a precipitous rise in HIV/AIDS and other infectious diseases. The kyat, Myanmar's currency, plunged to record lows in 2002–03.